Researchers from Calcutta and Melbourne have joined hands to understand how all hell broke loose on Wall Street following the bankruptcy of Lehman Brothers last September and how the crisis spread to financial markets across Europe.

The collaboration between the Indian Institute of Management, Calcutta, the oldest IIM, and the University of Melbourne, the second oldest university in Australia, is the first attempt by academicians in the two cities to study global finance jointly.

“Finance is IIM Calcutta’s special strength and there is so much to study after the global crisis in terms of what went wrong and what we can learn from it,” said Nassar Spear, deputy dean, department of accounting and business information systems, University of Melbourne.

Though the meltdown has taken the sheen off finance and employment opportunities in the sector have dwindled, the Joka B-school has retained its focus on financial research.

The institute has been studying the global economic crisis at its finance laboratory with data from markets across the globe. It is also offering a special course on what went wrong, the effect it had on financial markets and other related issues.

According to Spear, the Melbourne university can add value to the exercise by bringing the global perspective and sharing how the crisis has affected the Australian economy.

“The faculty of economics and commerce will focus on finance,” said Saibal Chattopadhyay, dean, programme initiatives, IIM Calcutta. The institutes will also explore the possibility of offering dual degrees, he added.

The memorandum of understanding, to be in effect for five years, will cover faculty and student exchanges and joint research, both by teachers and doctoral students. Exchange programmes can be for a couple of weeks, a semester or for a year.

The institutes will also planning collaborations to study banking sector regulations across countries, use of natural resources in the global context and development of entrepreneurship.

“The focus of the joint research will not be restricted to Australia and India, especially because students from several other countries come to IIM Calcutta under exchange programmes,” said a spokesperson for the Australian university.

IIM Calcutta also has tie-ups with Alfred P. Sloan School of Management (MIT), Ford Foundation and Yale School of Management.